Tuesday, March 20, 2007

Employee Morale and Uncertainty

The other day I was visiting a client site and was struck by how recent financial difficulties experienced by the client had impacted the workforce. As part of my job, I had to interview personnel at different levels, and as a result was able to get some great insight into the morale level of the employee group.While not the purpose of the visit, it certainly gave me food for thought for my weekly article here. The specifics of the corporate problems aren’t important for my discussion, but what is important is that the difficulties created a very specific environment of uncertainty for the employee group. They literally didn’t know from one day to another if they would be working for this company, another company, or not at all.
Now, I know something about this kind of uncertainty. Before the great PwC Human Capital diaspora, uncertainty was the watchword around the office. For those who don’t know, in the 2000 – 2002 timeframe, the human Capital practice at PwC was to be spun off for a new IPO called Unifi. That didn’t quite work out as planned, and eventually Unifi was purchased by Mellon Bank. The interim wasn’t pretty, however. The personnel who were part of the practice began dropping like flies.
What was once a great practice ended up splitting into multiple factions: part of the practice to the MCS practice later sold to IBM, part spun to Mellon Bank, part left inside of PwC, and many, many more leaving the firm to for other job opportunities.
During this change, employee morale couldn’t have been lower. Talk about engagement - we didn’t know what we were engaged in! Engagement teams were comprised of people who were ultimately going to different companies. Teammates became engaged in recruiting discussions on a regular basis.
There is no doubt that productivity declined at PwC during this time, just as it has at my client. The uncertainty becomes like a weight on people’s shoulders as they go to work every day.
In the cases I talk about here, there is little management can do to mitigate the negative impact of uncertainty. Any communication will have little impact, as resolution and closure to the causes of uncertainty is the only solution.
However, this is very instructive for us in situations of perceived uncertainty that actually have a lot of certainty. I think specifically of the situation of a company going through the process of large scale outsourcing. For employees going through this, some will lose jobs, others will change roles, and still others will change employers. This doesn’t have to be a time of uncertainty for them. Change management becomes critical. Clear and frequent communication and contact with employees throughout the process will keep them engaged, involved and ultimately more productive.
Where uncertainty pervades the workforce, morale will suffer. While some uncertainty is unavoidable, much can be avoided through communication and planning.About the author – Donald Glade is President and Founder of Sourcing Analytics, Inc., an independent consulting firm specializing in helping companies optimize their HR / benefits / payroll service partnerships through relationship management, financial analysis, and process improvement.